"TRADING VIEW FOR THURSDAY (06.05.2010)"

The market fell on the third straight day (Wednesday) mirroring weak global markets on worries that the Debt contagion could spread to other debt-stricken southern European nations such as Spain and Portugal. Tracking overnight sell-off in the Wall street and weak opening in Asian markets, the Sensex opened 33 points down at 17104 and soon extended its losses that led the Sensex to breach the crucial 17000 level for the first time in two months to touch the day’s low of 16858. However, market recovered most of its losses in the after noon session due to positive closing in China’s Shanghai Composite, bounce back in European markets and weak rupee regaining investor’s interest in information technology stocks, which aided the Sensex to touch the day’s high of 17122. The market almost recovered 264 points from day’s low. The Sensex managed to close above 17000 levels and shut at 17088, lower by 49 points. The Nifty also managed to close above 5100 levels and ended at 5125, 24 points lower.

Nifty SUPPORTS ::: 5107-5080-5050Nifty Resistance ::: 5155-5181-5217.

Today we may open around 5107 levels in the morning from where we could see a dead cat bounce towards 5181. However, DO NOT USE THIS TO BUY INTO STOCKS but rather to EXIT LONGS and sit on cash for the time being or alternatively at least hedge the longs to prevent evaporation of capital in the event of a steep correction.

STOCKS:: “NEVER TRY TO CATCH HOLD OF A FALLING KNIFE”. Hence, buy only if the stock is rising and as close to the EOD price of the previous day. WATCH IFCI, RELIANCE, GAIL.

Disclaimer: I am holding Nifty future and 5300 CE. I may have some vested interest in these reco.WARNING:: INTRADAY TRADING IS VERY RISKY. TRADERS ARE ADVISED TO TRADE AS PER THEIR RISK TAKING APETITE.